As the Chief Strategy Officer, you’re responsible for formalizing the company’s strategic planning processes and establishing greater transparency and accountability throughout the organization. Like John Doerr, Andy Grove of Intel, and Larry Page of Google, we believe that OKRs (Objectives and Key Results) are the modern solution to goal-setting and strategy execution. In our Chief Strategy Officer Playbook, we’ll detail how the methodology aligns everyone in the organization to your top corporate initiatives, and through the protocol’s transparency fosters accountability and engagement.
Although OKRs were first introduced in the tech sector and have enjoyed tremendous success with companies such as Google, Intel, LinkedIn, and Sales Force, they are also employed by companies like BMW, Amazon, Kroger, and Anheuser Busch. So, regardless of your industry, or the life stage of your company, we think our chief Strategy Officer Playbook has merit. Read on.
The Chief Strategy Officer Playbook for Executing Strategy with OKRs
Alignment & Engagement
Two of the greatest areas of concern for those in the C-Suite today are alignment and engagement. A Harvard Business Review study tells us that 95% of employees do not fully understand the company’s goals or what’s required of them. (Harvard Business Review: “Office of Strategy Management,” Robert Kaplan and David Norton).
Most workers have no concept of how their role and responsibilities link to the enterprise’s objectives. As a result, less than one-third of employees are engaged or enthusiastic about their work and workplace. And, yet we know that more highly engaged teams make more significant contributions, and retention is less an issue. A two-year Deloitte study found that no single factor has more impact on corporate performance than “clearly defined goals that are written down and shared freely. Goals create alignment, clarity, and job satisfaction.”
Objectives and Key Results is a simple process – it’s about setting goals. OKRs align everyone at your company, focus everyone’s effort on what truly matters, and make progress measurable to help you achieve your top corporate objectives. They improve clarity, direction, focus, and communication. They create the laser focus needed to succeed in today’s markets.
Creating alignment is a crucial aspect of what makes OKRs the next-generation goal-setting system. Employees need to understand how their responsibilities align to top corporate objectives. To drive superior performance, everyone must understand that their work matters on an organizational level.
In an OKR environment Objectives and Key Results are visible to everyone in the organization, top to bottom, and cross-functionally to ensure everyone is working towards the same goals.
Research shows that public goals are more likely to be attained than goals held in private. Simply flipping the switch to “open” lifts achievement across the board. In an OKR system, the most junior staff can look at everyone’s goals, on up to the CEO.
The CSO Playbook – Getting Started with OKRs
Once senior leadership’s buy-in and commitment to the OKR methodology are in place, it’s time to look at setting your initial Objectives. In most organizations setting these initial OKRs is the responsibility of the Chief Strategy Officer. How to get started? We suggest you look to your Mission, Vision Statement, and Strategic Pillars for inspiration, and then ask the question, “What is most important for the next three, six, twelve months?” The key is to focus on those three to five objectives that can really propel the organization forward.
Considerations for effective Objectives: They must answer the question, “What is it that we want to accomplish?” Your Objectives should be qualitative, inspirational, and action-oriented. We suggest you have a blend of aspirational goals and more attainable goals. smart The next step is developing Key Results in support of your initial Objectives. Key Results answer the questions, “How will we reach our Objectives, and how will we know if, and when, we’ve achieved our Objectives.” The best KRs (Key Results) use the SMART methodology; Specific, Measurable, Attainable, Relevant, and Time-Bound. Key Results typically use numbers and metrics.
Once your initial Objectives and Key Results are fleshed out, we suggest you communicate them broadly, an “all hands” meeting may be ideal. It’s important at this time to communicate both the “what” and the “why” of OKRs. Why are you adapting OKRs, what business issue are they addressing, hint: improved alignment is an excellent rationale, and why now.
Before executing your initial OKRs, we recommend two additional steps: 1. Assign an OKR Shepherd, a staff member who will be your ally and who will ensure compliance with conducting Check-Ins, meetings, and progress reports, and, 2. Although OKRs are a simple methodology, we recommend you conduct training for all staff members to be involved in the initial execution.
The CSO Playbook – Monitoring and Tracking Performance
One of the keys to improved performance in an OKR execution is their cadence. Although there are no hard and fast rules in the protocol, a best practice is setting quarterly OKRs. This cadence is more agile, nimble, and precludes procrastination. The shorter term, quarterly OKRs drive the actual work to be done and inform everyone of their immediate priorities.
Two critical features in your OKR system should be regularly scheduled, one-on-one Check-Ins and mid-quarter OKR team meetings. The only thing worse than bad news is bad news received too late to take corrective action. We believe your one-on-one meetings to monitor performance to Key Results should be a two-way communication. The individual contributor should be prepared to update performance towards the objective and to detail any roadblocks or obstacles hindering their performance. Note: in a quarterly cadence performance should be about 10% each week, which provides just a slight cushion in a twelve-week period.
For Key Results that appear “at risk” you have several options. Maintain the KR and course correct to address roadblocks to get results back on track. You may also adapt the KR, amend the KR, eliminate the KR, or roll the KR over to a subsequent quarter if the OKR is Aspirational.
The CSO Playbook – Scoring and Grading OKRs
A key attribute of OKRs is the real-time learning that takes place at the conclusion of each quarter.
Scoring can be accomplished by averaging the performance achieved against each Key Result. Google uses a scale of 0 to 1.0.
.7 – 1.0 = An acceptable performance, basically the desired result was achieved
.4 – .6 = Progress, but short of completion
.0 – .3 = Failure to make appreciable progress.
OKRs in the Failure category require a formal postmortem to determine what prevented achievement of the Objective.
The reason for Scoring is learning. We recommend an assessment of what worked, and what didn’t. The team should reflect on what can be done better in subsequent quarters. As philosopher and educator John Dewey says in “Measure What Matters,” by John Doerr, “we do not learn from experience – we learn from reflecting on experience.”
This Chief Strategy Officer Playbook is obviously an abbreviated version of an OKR implementation. Atiim also provides guidance and support through professional and experienced Customer Success Managers who assist you in the development of your initial OKRs, staff training, and education.
Are you a Chief Strategy Officer? Do you set strategy, goals, and track performance? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!